Detroit 'Grand Bargain' Bankruptcy Vote To Happen This Week

Jim Turner

Detroit retirees will be casting ballots this week on the so called "Grand Bargain" to determine how quickly the city exits bankruptcy and how much their pensions will decrease. The votes are due by July 11.

The 32,000 pensioners will be voting "yes" or "no" this week on a proposal that would cut pensions of non-uniformed retirees by 4.5 percent and end cost-of-living increases.

If the "Grand Bargain" is rejected, Detroit Emergency Manager Kevyn Orr has been warning, they could lose up to 30 percent, if U.S. Bankruptcy Judge Steven Rhodes agrees to impose the cuts according to

By voting "no", the retirees would be allowed to continue fighting pension cuts, which are banned under the Michigan constitution.

Rhodes ruled in December that pensions could be adjusted in federal bankruptcy court despite the state constitution.

In June, the Michigan legislature approved the state's participation in Detroit's bankruptcy, approving $195 million in aid for pensions and long-term oversight of city finances.

The state tax dollars would join a pool of $466 million in private funds to limit cuts to city pensions according to the Detroit News.

Governor Rick Snyder (R) has urged a "yes" vote. "There's really no value for someone to vote no," Snyder said at a press conference. "They're putting themselves at risk."

"It makes pensioners as whole as possible and protects the Detroit Institute of Arts from having its artwork seized and sold off," state senator Tupac Hunter (D- Detroit) said.

As reported in June by The inquisitr, retired police and firefighters received a pension of $30,607 in 2012 and general city workers got $19,213.

One difference between the groups of retirees is civilian workers receive social security while cops and firefighters do not.

"I don't think it's fair that (police and fire) are going to get a better deal," said Donald Smith, 69, who receives an annual pension of $11,000 a year after working 29 years as a civilian detention officer. "The fact was, they were working for the city just like we were working for the city."

Bruce Babiarz, spokesman for retired police and firefighters is urging members to vote "Yes." "That (a "no" vote) would be far worse than the settlement on the table. This is a very serious matter and people need to vote in terms of the impact on their pensions, their family and their life."

The retirees have also questioned if Detroit is broke, why is the city going ahead with plans to build a new $450 million hockey stadium for the Red Wings, about two-thirds of which will be taxpayer dollars.

A California consulting company was hired to tabulate the votes.

[Image via Detroit Free Press]